Galen House [2005] QBCCMCmr 535 (29 September 2005)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

I hereby order that the application for an order that

"1. the owner and occupier of Lot 1 should l accept that they have to abide by the BCCMA;

2. that the owner and occupier of Lot 1 pay their fair share of repairs to utility infra structure on common property viz. repairs to the common fuse box situated on the exterior of the building;
3. the owner and occupier of Lot 1 contribute to the maintenance fund, John Watson is refusing to do so;
4. the owner and occupier of Lot 1 return moneys removed from the maintenance fund without consent, The owner has cancelled the maintenance fund with the Bank and removed all the money from this fund, taking 50% which he reckoned was his share;
5. the owner and occupier of Lot 1 realise that he cannot steal electricity from the owner and occupier of Lot 2, and should pay for the theft of his electricity. Some years back John Watson erected a floodlight at the rear of the building and had this floodlight burning day and night. I have only just found out that he has this wired into my electrical supply, which would account why he felt happy to leave it on 24 hours a day;
6. the owner and occupier of Lot 1 should realise that there should be regular meetings of the Body Corporate and that discussions should be rational, civilised and devoid of obscenities and threats of physical violence;

7. the owner and occupier of Lot 1must realise that he cannot carry out works on common property without the consent and consultation of the Body Corporate, eg in the past he has on at least 4 occasions had plumbers in who dug up the external drainage pipe causing complete blockage of the drainage system causing overflow of toilets. I have then had to call in plumbers to rectify the problem" is dismissed

In lieu I order as follows :-

a) that within 2 weeks of the date of this order the owner of Lot 1, Janette Watson be made a
signatory to the Galen House Body Corporate account number 155009940 at St George’s
Bank;

b) that within 3 weeks of the date of this order the owner of Lot 1, Janette Watson pays into

the body corporate bank account number 155009940 at St Georges Bank the sum of

$719.34 being one half of the cost of the fuse box repair.

c) that within 3 weeks of the date of this order the owner of Lot 2, Amalgamated

Megadynamics Pty Ltd, pays into the body corporate bank account number 155009940 at St Georges Bank the sum of $1290 less the sum of any other amount that Amalgamated Megadynamics Pty Ltd or the applicant, Rodney Michael Tracey, director of Amalgamated Megadynamics Pty Ltd has paid into that account since 11^th August 2005;

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0379-2005

"Galen House" CTS 11646

APPLICATION

This is an application dated 18^th May 2005 by Rodney Michael Tracey ( the applicant) occupier of Lot 2 against Janette Watson and John Watson (the respondents) owner and occupier respectively of Lot 1 for an order in the following particulars –

JURISDICTION

"Galen House" Community Title Scheme 11646 is a scheme under the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module). The scheme consists of two lots created under a Building Unit Plan of subdivision. The title documents recorded in the Land Titles Registry show that each Lot has an equal entitlement in respect of the contribution schedule and the interest schedule.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Submissions were invited from the respondents. Submissions from the respondent John Watson were received through his solicitors Robert W Blank and Associates (the solicitor) on 29^th July 2005. The respondent Janette Watson did not make a submission. In reply the applicant advised that he had opened another bank account in the name of the body corporate.

The applicant is a director of the owner company Amalgamated Megadynamics Pty Ltd, which owns the top floor (Lot 2) of "Galen House", a two-storey house converted into an upper and a lower unit. The applicant is a surgeon and uses the premises of Lot 2 as professional offices for his practice, the Gold Coast Hernia Centre.

The respondent John Watson (Dr Watson) is an orthopaedic surgeon and uses the lower unit (Lot 1) as professional offices for his practice. Lot 1 is owned by Janette Watson.

It is not clear from the application if either or both parties also live on the premises the subject of the dispute, although neither the applicant nor the respondents give any address other than "Galen House." Certainly the applicant and the respondent Dr Watson have shared business premises for over 20 years, and known each other for about 30 years.

Given the length of time of their acquaintance and the bitterness of the current dispute, it is surprising that this community titles scheme has not previously been the subject of a dispute resolution application, yet this appears to be the only application made. It is clear that neither the applicant nor the respondent Dr Watson has much knowledge of body corporate procedure, or else they have decided to proceed without recourse to the legislation. That is fine until a dispute arises. In the circumstances of a dispute however, it is only the legislation which can be applied.

There appears to be no evidence at all of a dispute with the owner of Lot 1 Janette Watson, but only with the occupier Dr Watson. The applicant’s dispute with Dr Watson is clearly personal in nature as is admitted by his solicitor in his submissions. Dr Watson says that because of this, the dispute cannot be resolved and is "beyond jurisdiction."

Whilst I agree that nothing I can do can make the applicant and Dr Watson like each other, this office can ensure that a body corporate is administered in accordance with the legislation. That might assist in resolving disputes between the applicant and Dr Watson.

The bank account.
On 20^th April 2005, the solicitor told the applicant that Dr Watson was going to close the bank account called " Galen House " and held at St George Bank Limited. The account was effective as the body corporate account, even though it is referred to by the applicant as the " maintenance fund."

Dr Watson was not a signatory to that account although he says that he has been countersigning cheques on that account for years. The account was held in the names of Dr R.M Tracey ( the applicant), Dr DR Carroll (occupier of Lot 2) and Mrs J Watson ( owner of Lot 1). On 26^th April 2005, Mrs Watson wrote to the bank and "withdrew arrangements for Dr RM Tracey and Dr DR Carroll ... to have authority to operate the above account." How she managed this as a sole signatory to the account is a matter that the applicant and Dr Carroll might like to take up with the bank. In any event, the effect was that the body corporate account was unilaterally closed by a lot owner. One half of the total balance of $677.43 was sent to the applicant.

Despite the submission from the solicitor that for Dr Watson and the applicant to pay one half of body corporate outgoings is "in principle no different to making otherwise necessary nominal contributions to Administrative and Sinking Funds pending occurrence of events requiring joint expenditure", the legislation requires that the body corporate maintains a bank account.

(b) written evidence of payment, including, for example, a receipt.

Section 151 of the Act requires that the account must be opened with the consent, and in the name of the body corporate (section 151(2)). The account must be operated by the authorised members of the body corporate which means, in a community titles scheme which is governed by the Standard Module, at least two members of the committee for the body corporate. (section 150(6)).

Furthermore, section 105 of the Standard Module requires that the body corporate keeps proper accounting records which are open to inspection by members of the body corporate and presented to the annual general meeting. It is at the annual general meeting that the body corporate decides on the budget for the sinking fund for the next nine years, and the budget for the administrative fund for the following year, and decides on the amount of contributions payable by each lot owner and the frequency of the instalments. (section 95 Standard Module).

I understand that the applicant has opened another bank account at St George’s Bank, called "Galen House Body Corporate" and having the applicant as a sole signatory. The account was opened with the funds received from the previous Galen House account, $338.71. The account can correctly be called "Galen House Body Corporate" but must have Janette Watson and Amalgamated Megadynamics Pty Ltd’s representative (presumably the applicant) as signatories.

Whilst the consent of the body corporate was not obtained to open this account, in the circumstances it seems merely circuitous for any of the parties to return to the Commissioner’s office to seek to open a body corporate account. I order that Janette Watson be made a signatory to the Galen House Body Corporate account number 155009940 at St George’s Bank. Funds in the body corporate account do not belong to individual lot owners but to the body corporate. Funds in the body corporate account are not refunded for example when a lot owner sells his or her lot, but continue for the use of the body corporate to maintain the scheme property.

I further order that within the next 6 weeks the body corporate convenes a general meeting to decide contributions to be made to the sinking fund and administrative fund which can be paid directly into the body corporate account.

The fuse box
There is no doubt that the fuse box itself and the meters on it are common property to be maintained by the body corporate. By virtue of section 20 of the Act, utility infrastructure, as defined in the Act is common property to be maintained by the body corporate.

It appears that 30 years ago, the current occupants decided not put in new meters and were satisfied that although the hot water system in Lot 1 supplied the whole of the building (and is therefore common property utility infrastructure), the meter for the hot water system ( also common property) was in Lot 2’s section of the meter board.

Over the years, Lot 1 has put in three or four airconditioning units and Lot 2 has put in 3 airconditioning units. The switchboard for several reasons has become old and dangerous and needed repair, and it would be surprising if it had not required updating or upgrading in 30 years of commercial use. The repair was effected at the applicant’s cost of $1438.68 in 2003. Dr Watson says that he does not owe half the account of AEC Electrics firstly, because the applicant effected the fuse box repairs without prior consultation and the state of the fuse box was caused by the applicant’s installation of a new air conditioner, ( a fact which is not supported by any evidence), and secondly, because the applicant has since said he will pay for it himself "rather than quibble about $700 or so." I would add that Dr Watson does not owe one half to the body corporate because he is not a lot owner and therefore not liable to make contributions to the maintenance of the body corporate common property.
.
A lot owner cannot take on responsibility for common property, even he is willing to do so, nor can he or she effect repairs to it unilaterally. The procedure should have been that a general meeting was called of the two owners ( Amalgamated Megadynamic’s representative and Janette Watson) and a note taken about what repairs were required and who should do the work, with 2 quotations obtained if the work was to be beyond the "relevant limit of major spending" , ie $250 x 2. In a duplex, such a meeting can be called without great formality but must be agreed and minuted. If the owners could not reach agreement on the work to be done or the person to do it, then an application could have been made to the Commissioner’s office for specific work by a specific operator be carried out. The Commissioner has powers to make orders where there is an emergency, eg if there was no power, or the fuse box was in a dangerous state.

I make an order that Janette Watson pay to the body corporate bank account the sum of $719.34 being one half of the cost of the fuse box repair.

The security light
The applicant has not apparently noted the large amounts allegedly abstracted on his electricity bill over 8 or 10 years, and Dr Watson has agreed to pay a certain sum for his use of the applicant’s power to run the security light. Further, a security light attached to the exterior of a building under a Building Unit Plan, will be a light affixed to common property, for the use of the common property. If the light is only for the benefit of one lot owner, that lot owner should have sought permission for its erection on common property and approval might have been conditional on that owner maintaining and paying for the running of that light, which would be a usual condition imposed.

I understand that Dr Watson has now arranged for the security light to be connected to a meter on his part of the fuse box. I make no order in respect of this light. The Commissioner’s office has no jurisdiction to deal with crime, and the allegation is now too old to be a matter for dispute resolution.

The sewerage work
Sewerage is also utility infrastructure. In accordance with the exceptions listed in section 20(1)(a)(b) and(c) of the Act, the sewerage within a lot owner’s lot, solely relating to supplying utility services to that lot and situated other than in a boundary structure, is the responsibility of the lot owner. From the copies of correspondence submitted, I believe that both the applicant and Dr Watson appreciate that the fitting of a new toilet suite would be the responsibility of the lot owner and fitted at no expense to the body corporate. I understand that this is partly the reason why Dr Watson has said he will pay Benowa Plumbing’s bill of $3249.30, which was made out to him personally.

Cable television wires positioned in the service shaft of a multistorey building that is

scheme land for a community titles scheme, if the wires remain in the ownership of a

As the remainder of the sewerage is common property to be maintained by the body corporate, a lot owner cannot take on the responsibility for it, nor effect repairs to it.

Three quotations had already been obtained, when Dr Watson, who is not an owner, authorised a fourth plumber and drainer, despite opposition from the representative of the only other member of the body corporate, to conduct work on common property. In my view this was done, less because there was a blockage in the pipes causing an emergency, than deliberately to antagonise the applicant who was given 1 day’s notice of the fourth plumber’s starting date, even though negotiations were at the time being conducted on the question of choice of plumber.

The applicant does not ask that I make an order for the body corporate property to be reinstated which I have considered, but rejected on the grounds that it may cause further inconvenience to lot owners. I note that the last quotation from Terry Stokman Plumbing was $2,900 (March 05), which did not contain a quotation for Dr Watson’s new toilet and connecting pipes. The applicant was in favour of the Terry Stokman Plumbing quotation.

I therefore order that Amalgamated Megadynamics Pty Ltd should pay $1450 into the body corporate bank account . It is noted that since 12^th May 2005, the applicant, as nominated representative of the company, has additionally contributed the sum of $160 to the body corporate account, and that sum, and any other contributions paid into that account since 11^th August 2005 may be deducted from the sum of $1450.00.

I note that the solicitor says that Dr Watson accepts that he is subject to the Act. It is clear to me that all parties concerned have a fairly cavalier attitude to the legislation. Whilst one of the aims of the Act is to provide flexibility for community titles schemes to manage their own schemes, I point out that an order of an adjudicator can be enforced through the Magistrates Court and that the penalty for non-compliance with an order currently carries a maximum penalty of 400 penalty points ie $30,000 (section 288 Act).

The parties are not looking, as they should, at the body corporate being a third entity with legal standing which exists to administer the scheme, the common areas, the utility infrastructure and the maintenance of the building. In a building unit plan of subdivision the body corporate is responsible for the maintenance of all the exterior of the building and its structure. (section 109 Standard Module).

The body corporate of a community titles scheme is required to hold a minimum of one meeting per year (the annual general meeting) at which certain statutory motions are to be put, eg approval of the payment of the insurance premium in accordance with the cover required by the legislation, the approving of the accounts, and the settling of the forthcoming year’s budget.

Brochures on running a community titles scheme are available from the information service of the Commissioner’s Office on 1800 060 119 or the website at www.dtftwid.qld.gov.au/Dispute+Resolution/BCCM

It is hoped that if the parties comply with the minimum requirements of the legislation that Dr Watson and the applicant would only have to talk (or correspond through the solicitor) once a year, which might lessen friction and expense.

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

R Tracey, the Owner of lot 2 and an Order of an adjudicator made on 29^th September 2005 reference 0379-2005 made in the following terms:-

I hereby order that the application for an order that

"1. the owner and occupier of Lot 1 should l accept that they have to abide by the BCCMA;

7. that the owner and occupier of Lot 1 pay their fair share of repairs to utility infra structure on common property viz. repairs to the common fuse box situated on the exterior of the building;
8. the owner and occupier of Lot 1 contribute to the maintenance fund, John Watson is refusing to do so;
9. the owner and occupier of Lot 1 return moneys removed from the maintenance fund without consent, The owner has cancelled the maintenance fund with the Bank and removed all the money from this fund, taking 50% which he reckoned was his share;
10. the owner and occupier of Lot 1 realise that he cannot steal electricity from the owner and occupier of Lot 2, and should pay for the theft of his electricity. Some years back John Watson erected a floodlight at the rear of the building and had this floodlight burning day and night. I have only just found out that he has this wired into my electrical supply, which would account why he felt happy to leave it on 24 hours a day;
11. the owner and occupier of Lot 1 should realise that there should be regular meetings of the Body Corporate and that discussions should be rational, civilised and devoid of obscenities and threats of physical violence;

7. the owner and occupier of Lot 1must realise that he cannot carry out works on common property without the consent and consultation of the Body Corporate, eg in the past he has on at least 4 occasions had plumbers in who dug up the external drainage pipe causing complete blockage of the drainage system causing overflow of toilets. I have then had to call in plumbers to rectify the problem" is dismissed

d) that within 3 weeks of the date of this order the owner of Lot 1, Janette Watson pays into

the body corporate bank account number 155009940 at St Georges Bank the sum of

$719.34 being one half of the cost of the fuse box repair.

e) that within 3 weeks of the date of this order the owner of Lot 2, Amalgamated

I further order that within 6 weeks of the date of this order the body corporate convenes a general meeting to adopt a budget and decide contributions to be made to the sinking fund and administrative fund for the community title scheme of Galen House CTS 11646 .

I NOW FURTHER ORDER AS FOLLOWS:-

That within three (3) weeks of the date of this order that the owner of Lot 1, Janette Watson pays into the body corporate account number 155009940 at St Georges Bank the sum of $ 338.72 being reimbursement of the sum removed from the Galen House account number 041233071 on 6^th May 2005

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0379-2005A

"Galen House" CTS 11646

I made an order on 29^th September 2005 in this matter reference 0379-2005.

Whilst I referred in my reasons for decision to the fact that no lot owner may remove funds from the body corporate account for his or her own benefit, I did not order that the owner of Lot 1, Janette Watson, return the sum removed by her from the then body corporate account.

The final sum in the account as given by occupier of Lot 1, Dr Watson, and not queried by the applicant, was $677.43, and the sum of $338.71 was sent to the applicant. I now order that the remaining balance of $338.72 be repaid into the new body corporate account by Janette Watson..

In all other respects I confirm the order made on 29^th September 2005 in matter reference 0379-2005.

Number of Scheme:	11646
Name of Scheme:	Galen House
Address of Scheme:	142 Queen Street SOUTHPORT QLD 4215

	that the respondents abide by the Body Corporate and Community Management Act 1997;
	that the respondents pay a fair share of repairs to utility infrastructure on common property viz. repairs to the common fuse box;
	that the respondents contribute to the "maintenance fund";
	that the respondents return moneys removed from the "maintenance fund" without consent;
	that the respondents realise that they cannot steal electricity from the applicant in respect of the running of a flood light;
	that the respondents should realise that there should be regular meetings of the body corporate
	that the respondents must realise that they cannot carry out works on common property without the consent and consultation of the body corporate.

Number of Scheme:	11646
Name of Scheme:	Galen House
Address of Scheme:	142 Queen Street SOUTHPORT QLD 4215

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Galen House [2005] QBCCMCmr 535 (29 September 2005)